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Regulations challenge must await implementation

| May 11, 2015

Kenya’s Attorney General has hit out at an attempt by British American Tobacco Kenya to stop the implementation of the Tobacco Control Regulations 2014, which is due to come into force on June 6, according to a story by Caroline Rwenji for The Standard.

Through a state counsel, AG Githu Muigai reportedly said that the case filed by BAT Kenya was premature and illogical because the regulations were yet to be effected.

High Court Judge, Mumbi Ngugi, declined to issue temporary orders stopping the implementation of the tobacco regulations next month and instead directed that the matter proceed to hearing on June 27.

BAT Kenya went to court under a certificate of urgency seeking to have the regulations quashed on the grounds that they were unconstitutional.

The company’s head of legal affairs, Simukai Munjanganja, was said to have argued that the cost of compliance with the new regulations was huge and would negatively impact the company.

EU moves closer to joining illegal trade protocol

| May 11, 2015

The European Commission decided last week to recommend that the EU should join an international agreement it believes is set one day to become the key multilateral instrument in the fight against the illegal trade in tobacco products, according to an EU press note.

The proposal is that the Council, with the consent of the European Parliament and on behalf of the EU, concludes the Protocol to Eliminate Illicit Trade in Tobacco Products under the World Health Organization’s Framework Convention on Tobacco Control (FCTC Protocol).

Then, all member states would either ratify or accede to the FCTC Protocol to become parties.

Once this process was over, the FCTC Protocol would have 29 EU signatories.

It needs to be ratified by 40 signatories to enter into force.

So far, the FCTC Protocol, which was agreed in 2012, has seven parties (Austria, Gabon, Mongolia, Nicaragua, Spain, Turkmenistan and Uruguay).

The EU signed the FCTC Protocol on 20 December 2013, which is the first step towards the EU becoming a party to the agreement.

Value of Swedish Match’s sales up sharply in Q1

| May 8, 2015

Swedish Match’s (SM) sales during the three months to the end of March, at SEK3,368 million, were up by 12 percent on those of the three months to the end of March 2014, SEK3,014 million.

Operating profit was up by about 18 percent to SEK1,014 million, while operating profit from product areas, which excludes SM’s share of the Scandinavian Tobacco Group’s (STG) net profit, was increased by seven percent to SEK866 million.

Sales and operating profit from product areas were negatively impacted by trade destocking of snus in Scandinavia following excise tax increases on January 1, while operating profit was positively affected by an adjustment of SM’s share of net profit in STG of SEK56 million.

Earnings per share (EPS) were up by 26 percent to SEK3.86, while EPS excluding the STG adjustment were increased by about 17 percent to SEK3.40.

In announcing the first quarter interim report, CEO Lars Dahlgren said that a strong underlying US performance and currency effects had more than offset expected lower results in the Scandinavian snus business. “We successfully gained share in the growing value priced segment in Sweden but volumes in Scandinavia were affected by trade destocking during the quarter,” he said.

“The US represents an important and significant market to Swedish Match. During the first quarter all of our US businesses delivered an impressive performance, which when coupled with the significantly stronger US dollar, was a key factor behind our good growth in operating profit.

“Cigars in the US had a very strong performance with both volume growth and an improved mix…

“Chewing tobacco volumes declined but improved pricing and lower costs more than offset the impact of the lower volumes.

“Our US moist snuff volumes rose five percent driven by strong growth in the pouch and tub segments. Spending behind snus in the US was lower but volumes continued to show a positive trend.”

Dahlgren then turned to SM’s modified risk tobacco product applications currently before the US Food and Drug Administration, selected parts of which were the subject of hearings by the Tobacco Products Scientific Advisory Committee in early April. “We are in many respects pleased with the committee hearings and feel that the scientific evidence discussed supports our modified risk applications for our General snus in the US,” he said. “We expect to hear back from the FDA in the coming months.”

Power outages disrupt production in South Africa

| May 8, 2015

British American Tobacco is losing as much as 10 percent of its South African output due to power cuts, according to a Reuters story.

South Africa is said to be in the middle of its worst electricity crisis since 2008; so private and business customers suffer frequent controlled blackouts, which state utility Eskom implements to prevent the grid from collapsing.

Arturo Rodriguez, head of BAT’s South African unit, said that despite having back up diesel-powered generators to run the factory, the unpredictable timing and duration of the outages had resulted in between five percent and 10 percent output losses at its Heidelberg plant.

Indonesia seen as tobacco-tax battle ground

| May 8, 2015

A professor of public health at the University of Indonesia’s School of Public Health, Hasbullah Thabrany, has warned that Indonesia has become a main target for the tobacco industry, according to a story in The Jakarta Post.

“It seems that we are in a battle ground, where tobacco company owners are among the country’s richest people, making money from poor people addicted to their product,” Hasbullah said.

The National Commission on Tobacco Control, together with civil and health groups concerned with tobacco control in Indonesia, has urged the government to ignore pressure from the tobacco industry and the International Tax and Investment Center, which is seen as fighting for the cigarette industry’s agenda.

Hasbullah said that if the government wished to regain its sovereignty over the economy, it had to implement a pro-people economic policy.

US tobacco farm workers on ‘subminimum wages’

| May 8, 2015

A farm labor advocacy group was due yesterday to conduct a street protest for the eighth consecutive year outside the headquarters of Reynolds American Inc, according to a story by Richard Craver for the Winston-Salem Journal.

The protest was scheduled to begin shortly after the end of Reynolds’ annual shareholder meeting.

The protest is said to be the most public way that the Farm Labor Organizing Committee (FLOC) can try to influence Reynolds executives to take a more active role with tobacco suppliers on worker safety issues. According to the North Carolina Growers’ Association, FLOC represents about 2,000 farm workers in the state.

FLOC is said to have identified a number of problems at tobacco farms, including fatalities, subminimum wages, child labor, and the lack of water and breaks during work. Studies by Wake Forest Baptist Medical Center researchers have documented such conditions.

Three FLOC-supported shareholder proposals were due to be presented at yesterday’s meeting.

Meanwhile, Craver reported that in December Reynolds and the Altria Group confirmed that contracts with tobacco growers prohibited – starting in 2015 – the hiring of anyone under the age of 16 to work in their fields.

And those aged 16 and 17 will be required to receive safety training and wear appropriate personal protective equipment, as well as provide written parental authorization prior to beginning employment.

The policies will not apply to minors working on their family farms.

Craver’s report is at:

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